Summary
holding that evidence was legally and factually sufficient to support determination that appellee's DTPA violations were a producing cause of appellants' damages because appellee deficiently selected slab-on-grade foundation for appellants' home despite soil report stating that slab-on-grade floor system should not be used due to excessive shrink/swell movement potential of high plasticity clays found at site
Summary of this case from MBR & Assocs., Inc. v. LileOpinion
No. 11-02-00132-CV.
February 19, 2004.
Appeal from Dallas County.
Panel consists of: ARNOT, C.J., and WRIGHT, J., and McCALL, J.
Memorandum Opinion
The motion for rehearing filed by The Holmes Builders, Inc. and the motion for judgment nunc pro tunc filed by Gary Carpenter and Julie Perez are overruled. Our former opinion and judgment dated December 18, 2003, are withdrawn, and our opinion and judgment dated February 19, 2004, are substituted therefor.
This appeal arises from a defective house foundation claim. Appellants, Gary Carpenter and Julie Perez, entered into a written contract in June 1994 with appellee, The Holmes Builders, Inc., to build a home for them in Farmers Branch, for a total purchase price of $641,000. Appellants moved into the home in January 1995. They filed suit against appellee in May 1999, alleging that the foundation for their home was inadequately designed and constructed. Appellants asserted numerous theories of liability, including negligence, breach of warranty, violations of the Texas Deceptive Trade Practices — Consumer Protection Act (DTPA), and fraud. Appellants additionally pleaded that the applicable limitations periods for their causes of action were tolled under the discovery rule.
The purchase price included the price of the lot upon which the house was located.
TEX. BUS. COM. CODE ANN. §§ 17.41-17.63 (Vernon 2002).
The jury made liability findings supporting appellants' negligence, DTPA, and breach of warranty claims. The jury also answered a limitations-accrual question favorably for appellants with respect to their DTPA and breach of warranty claims. The jury awarded appellants damages of $1,876,600.
The amount of $1,876,600 does not include prejudgment interest, post-judgment interest, or recoverable court costs.
Appellee attacked several of the jury's findings in a motion for judgment notwithstanding the verdict. The motion included a challenge of the jury's findings regarding the date upon which appellants' DTPA and breach of warranty claims accrued. The trial court granted the motion solely on the issue of limitations and entered judgment that appellants take nothing. Appellants assert in their first issue that the trial court erred in disregarding the jury's determination that their DTPA claims accrued less than two years prior to the date they filed suit. We agree with this contention. We reverse the trial court's take-nothing judgment.
Standard of Review
A judgment notwithstanding the verdict (JNOV) is proper when a directed verdict would have been proper. TEX.R.CIV.P. 301; Fort Bend County Drainage District v. Sbrusch, 818 S.W.2d 392, 394 (Tex. 1991). A plaintiff is entitled to a directed verdict if he has conclusively proved the elements of his cause of action, that is, when reasonable minds can draw only one conclusion from the evidence. In re Estate of Crawford, 795 S.W.2d 835, 838 (Tex.App.-Amarillo 1990, no writ) (citing Collora v. Navarro, 574 S.W.2d 65, 68 (Tex. 1978)). A directed verdict for a defendant is appropriate when the plaintiff fails to present evidence raising a fact issue essential to the plaintiff's right of recovery or when the evidence conclusively establishes a defense to the plaintiff's cause of action. Prudential Insurance Company of America v. Financial Review Services, Inc., 29 S.W.3d 74, 77 (Tex. 2000).
A trial court may disregard a jury's findings and grant a motion for judgment notwithstanding the verdict when there is no evidence upon which the jury could have made its findings. See Mancorp, Inc. v. Culpepper, 802 S.W.2d 226, 227 (Tex. 1990). "No evidence" exists and the trial court should render a JNOV, when the record discloses one of the following: (1) a complete absence of evidence of a vital fact; (2) the trial court is barred by rules of law or evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a scintilla of evidence; or (4) the evidence establishes conclusively the opposite of a vital fact. See Juliette Fowler Homes, Inc. v. Welch Associates, Inc., 793 S.W.2d 660, 666 n. 9 (Tex. 1990). To determine whether there is any evidence, we review the record in the light most favorable to the verdict, considering only the evidence and inferences that support the verdict and rejecting the evidence and inferences contrary to the verdict. Mancorp, Inc. v. Culpepper, supra at 227. When there is more than a scintilla of competent evidence to support the jury's findings, an appellate court will reverse the JNOV. See Mancorp, Inc. v. Culpepper, supra at 228. More than a scintilla of evidence exists when the evidence supporting the finding rises to a level that would enable reasonable minds to differ in their conclusions. See National Convenience Stores, Incorporated v. Matherne, 987 S.W.2d 145, 148 (Tex.App.-Houston [14th Dist.] 1999, no pet'n) (stating rule in context of reviewing denial of JNOV).
DTPA Limitations
A claim under the DTPA is subject to the act's two-year limitations provision:
All actions brought under this subchapter must be commenced within two years after the date on which the false, misleading, or deceptive act or practice occurred or within two years after the consumer discovered or in the exercise of reasonable diligence should have discovered the occurrence of the false, misleading, or deceptive act or practice.
Section 17.565. The DTPA incorporates the discovery rule. Burns v. Thomas, 786 S.W.2d 266, 267 (Tex. 1990). The discovery rule is an exception to the general rule that a cause of action accrues when facts come into existence that authorize a claimant to seek a judicial remedy. Robinson v. Weaver, 550 S.W.2d 18, 19 (Tex. 1977). Under the rule, limitations will not begin to run until the claimant discovers, or in the exercise of reasonable diligence should have discovered, the facts establishing a cause of action. Burns v. Thomas, supra at 267.
As noted previously, appellants filed their original petition in May 1999. Since the original transaction between appellants and appellee occurred more than two years prior to May 1999, appellants' DTPA claims would be time-barred unless the commencement of the applicable limitations period was tolled under the discovery rule. The jury answered a limitations-accrual question as follows:
By what date did [appellants] discover, or in the exercise of reasonable diligence, should [appellants] have discovered the conduct, if any, as to which you answered "yes" in response to Question Nos. 1, 2, 3 and 4?
Answer with Month and Year for each of the following separately:
7-96 7-98 3-99 2-98
Negligence (Question No. 1) Deceptive Act or Practice (Question No. 2) Unconscionable course of conduct (Question No. 3) Failure to comply with warranty (Question No. 4) A cause of action for negligence is governed by a two-year statute of limitations. TEX. CIV. PRAC. REM. CODE ANN. § 16.003(a) (Vernon 2002). The jury's determination that appellants knew or should have known of their negligence claim more than two years prior to the date suit was filed precluded appellants' recovery on a negligence theory. However, the jury's answers of "July 1998," "March 1999," and "February 1998" permitted appellants' recovery on their DTPA theory of liability.Effect of Jury's Determination of Accrual Date for Appellants' Negligence Claim
Appellee initially directed its limitations contention at the evidence offered at trial. Appellee asserted in the motion for judgment notwithstanding the verdict that the evidence conclusively established that appellants discovered the existence of their DTPA causes of action in July 1996. Appellee's argument on appeal includes an additional reason for upholding the judgment notwithstanding the verdict. Appellee contends that the jury's answer of "July 1996" with respect to the date appellants knew or should have known of the existence of their negligence claim is another basis for upholding the judgment notwithstanding the verdict.
Appellee argues that appellants' negligence and DTPA causes of action accrued at the same time. Relying upon this argument, appellee contends that the jury's determination of an accrual date of July 1996 for appellants' negligence cause of action establishes that appellants did not timely file their DTPA claim. Even if appellee's assertion that appellants' negligence and DTPA claims accrued at the same time is correct, appellee has not cited any authority why the jury's answer for the accrual of the negligence claim should prevail over the answer for the DTPA claim's accrual date. In the absence of such authority, we reject appellee's argument that the jury's determination of the accrual date of appellants' negligence cause of action nullifies the jury's answer regarding the accrual date of appellants' DTPA claim. Instead, we employ the traditional standard of review for a judgment notwithstanding the verdict by examining the record to determine if there is any evidence upon which the jury could have made its determination of the accrual date of appellants' DTPA claim. See Mancorp, Inc. v. Culpepper, supra at 227.
Appellee is essentially contending that the jury should have determined the same accrual date for appellants' negligence and DTPA claims. Appellee did not raise the issue of conflicting jury answers prior to the jury's discharge. A claim of irreconcilable jury findings is waived if not raised prior to the jury's discharge. Roling v. Alamo Group (USA), Inc., 840 S.W.2d 107, 109 (Tex.App.-Eastland 1992, writ den'd).
Evidence Pertaining to the Accrual of Limitations
Appellants undertook efforts to sell their home in 1996. A potential buyer retained Pete Hennessey, a structural engineer, to inspect the home. Hennessey inspected the home on July 12, 1996. He prepared a report of his findings on July 18, 1996. He reported that the house was constructed with a post-tensioned, concrete slab foundation. He stated as follows with respect to the foundation: "Survey readings taken on the foundation slab indicated that there was a 1½ [inch] variation in the finished floor elevation. This is indicative of some heave in the foundation." He also noted cracks in the mortar, doors in need of adjustment, hairline cracks in walls, and separation of trim. Hennessey attributed the movement of the foundation to inadequate drainage around the home. He concluded his report by stating that the house will have "some foundation maintenance" over the future years for which an allowance of $20,000 would be reasonable. Hennessey testified at trial that the foundation movement he observed in July 1996 did not exceed the applicable building code tolerances for the levelness of a house foundation.
Hennessey and the other testifying experts used the word "heave" to describe the upward movement of a structure's foundation.
Appellants subsequently conferred with Dean Trudel, appellee's vice president for construction, to discuss Hennessey's report. Appellant Carpenter testified that Trudel asserted at the meeting that there were not any problems with the home. Appellant Carpenter further testified that Trudel advised him that the foundation movement noted by Hennessey was within acceptable limits and that there was always some settling that occurred with a new home. Trudel testified that he considered the problems identified by Hennessey in 1996 to be normal.
At the suggestion of their realtor, appellants retained Robert W. Jensen, another engineer, to inspect their home in August 1996. Jensen reported his findings as follows:
The foundation of this building is in satisfactory structural condition with no significant signs of settlement or distress; no remedial action to foundation is necessary. Some very minor movement has apparently occurred along south side of dining room, possibly at SE side of front entry area, at NW side of den and at SE and NW sides of gameroom, which is not unusual during the initial years in the life of a structure. Distress to masonry veneer and drywall finishes is considered to be cosmetic in nature, related to soil movements from typical post-construction consolidation and volumetric soil movements due to seasonal moisture variations. We consider any foundation deflections to be within acceptable tolerances.
Jensen described, during his testimony at trial, the condition of the foundation in August 1996 as being satisfactory.
Appellants' efforts to sell the home were unsuccessful. In the latter part of 1997, a handyman working at appellants' home advised them of his concern regarding some cracks that he had observed at the home. The handyman informed appellants that he previously worked for a foundation repair company. He felt that the cracks that he observed needed to be checked out by an expert. Acting upon the advice of their handyman, appellants hired another engineer to inspect the home in February 1998. An elevation survey conducted by Nik Manesh revealed that the home's foundation was unlevel by 4.7 inches. He concluded that the house had experienced a combination of seasonal movement and settlement. Manesh also believed that the concrete foundation of the home had been poured unlevel. Manesh proposed the installation of 12 additional piers to stabilize the house's foundation. In May 1998, appellee retained a foundation repair company to perform the work recommended by Manesh.
Jensen performed another inspection of the home in October 1998 after the completion of the repairs suggested by Manesh. Jensen concluded that some movement of the foundation had occurred since his first inspection in August 1996. He noted that the foundation had as much as five inches of elevation differential. He attributed the movement to expansion of the soil supporting the foundation.
Analysis
The accrual of a DTPA action occurs when the plaintiff knew or should have known of the wrongfully caused injury. KPMG Peat Marwick v. Harrison County Housing Finance Corp., 988 S.W.2d 746, 749 (Tex. 1999); J.M. Krupar Construction Co., Inc. v. Rosenberg, 95 S.W.3d 322 (Tex.App.-Houston [1st Dist.] 2002, no pet'n). Appellee contends that the initial findings made by Hennessey in July 1996 conclusively established that appellants knew or should have known of their injury in July 1996. Under appellee's analysis, appellants knew or should have known of their injury when they became aware of any property damage with the home.
The primary injury for which appellants seek a recovery is a defectively designed and constructed house foundation. While there is no dispute that Hennessey noted some foundation movement and cosmetic deficiencies with the home in July 1996, he described the movement to be within the applicable building code tolerances for the levelness of a house foundation. Appellee's representative characterized the matters noted by Hennessey as normal changes. Jensen determined that the house's foundation was in satisfactory structural condition soon after Hennessey's inspection. These matters constitute evidence that appellants were not aware that the home's foundation was defective in July 1996. The findings made by Manesh in February 1998 support the jury's determination that appellants' DTPA claim did not accrue until that date. Appellants' first issue is sustained.
Appellants' Remaining Appellate Issues
Appellants have briefed three additional issues on appeal. Appellants' second, third, and fourth issues are in the nature of responses to cross-points which appellants anticipated being raised by appellee in support of the judgment notwithstanding the verdict. The second issue addresses appellants' contention that appellee waived complaints regarding the jury charge. We do not address the second issue because its determination is not relevant to a resolution of the parties' contentions on appeal. Appellants' third issue is an anticipatory response to a challenge of the evidence supporting the jury's award of mental anguish damages to appellants. With respect to their fourth issue, appellants contend that the evidence was sufficient to support the jury's determination of liability as to causation. Appellants' third and fourth issues are addressed below in our discussion of appellee's cross-points.
Cross-Points
When an appellate court determines that the trial court erroneously rendered a judgment notwithstanding the verdict, the appellate court must reverse the judgment of the trial court and enter judgment in harmony with the verdict unless the appellee presents a cross-point sufficient to vitiate the jury's verdict. See TEX.R.CIV.P. 324(c); TEX.R.APP.P. 38.2(b); Burns v. Resolution Trust Corporation, 880 S.W.2d 149, 151 (Tex.App.-Houston [14th Dist.] 1994, no writ). Appellee has responded to appellants' third and fourth issues by asserting that the evidence was legally and factually insufficient to support the jury's award of mental anguish damages and the jury's determination that appellee's conduct constituted a producing cause of damages to appellants. We address appellee's responses to appellants' "anticipatory" appellate issues as cross-points. See TEX.R.APP.P. 38.9.
Mental Anguish Damages
The jury awarded each appellant mental anguish damages in the amount of $150,000. Appellee challenges the legal and factual sufficiency of the evidence supporting this award. To review the legal sufficiency of the evidence, the appellate court must consider all the evidence in the light most favorable to the prevailing party and must indulge every reasonable inference in favor of the prevailing party. Associated Indemnity Corporation v. CAT Contracting, Inc., 964 S.W.2d 276, 285-86 (Tex. 1998); Merrell Dow Pharmaceuticals, Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997), cert. den'd, 523 U.S. 1119 (1998); Harbin v. Seale, 461 S.W.2d 591, 592 (Tex. 1970). Any evidence supporting the finding that is of probative value and that is more than a scintilla is legally sufficient to uphold the finding. Leitch v. Hornsby, 935 S.W.2d 114, 118 (Tex. 1996); see Merrell Dow Pharmaceuticals, Inc. v. Havner, supra. In order to determine if the evidence is factually sufficient, we must review all of the evidence and determine whether the challenged finding is so against the great weight and preponderance of the evidence as to be manifestly unjust. Pool v. Ford Motor Company, 715 S.W.2d 629 (Tex. 1986); In re King's Estate, 244 S.W.2d 660 (Tex. 1951).
The jury awarded damages to appellants as follows: (a) mental anguish damages to Appellant Carpenter — $150,000; (b) mental anguish damages to Appellant Perez — $150,000; (c) reasonable and necessary costs of repairing appellants' home — $550,000; (d) loss of market value of home after repairs are completed — $107,000; (e) appellants' attorney's fees — $111,000; and (f) additional damages under the DTPA — $1,000,000.
To support an award of mental anguish damages, a plaintiff must either present "direct evidence of the nature, duration, and severity of [his] mental anguish, thus establishing a substantial disruption in the plaintiffs' daily routine," or "evidence of `a high degree of mental pain and distress' that is `more than mere worry, anxiety, vexation, embarrassment, or anger.'" Latham v. Castillo, 972 S.W.2d 66, 69-70 (Tex. 1998) (citing Parkway Company v. Woodruff, 901 S.W.2d 434, 444 (Tex. 1995)). The evidence must also justify the amount awarded. Saenz v. Fidelity Guaranty Insurance Underwriters, 925 S.W.2d 607, 614 (Tex. 1996). Although the impossibility of any exact valuation requires that juries be given a measure of discretion in finding damages, that discretion is limited. Saenz v. Fidelity Guaranty Insurance Underwriters, supra. A jury must find an amount that "would fairly and reasonably compensate" for the loss; however, "[j]uries cannot simply pick a number and put it in the blank." Saenz v. Fidelity Guaranty Insurance Underwriters, supra at 614.
Appellant Carpenter testified that the problems with his "dream home" had weighed heavily on his mind. He testified that it was very painful for him to see the problems with the home on a daily basis. He stated that he suffered a great deal of anxiety, embarrassment, and feelings of helplessness living in a home that could not be sold and that continued to get worse. He also attributed a recurring eye infection to the stress caused by the problems with the home. Appellant Carpenter testified that he had endured many sleepless nights in the 3½ years preceding the trial. Appellant Perez testified that she had cried every day since receiving Manesh's report in 1998. She stated that the ordeal had put appellants' lives "on hold" for 3½ years. She additionally testified that the matter caused a great deal of stress on a daily basis. Appellant Perez testified that she had also lost sleep and experienced severe worry and anxiety.
Appellants' testimony constitutes evidence that the ordeal concerning their home caused a substantial disruption of their daily routines over an extended period of time. As such, the jury's award of mental anguish damages was supported by legally sufficient evidence. Furthermore, the award of mental anguish damages is not against the great weight and preponderance of the evidence. The evidence is also both legally and factually sufficient to support the amounts of mental anguish damages awarded by the jury. Appellants testified that they suffered mental anguish on a daily basis over an extended period of time. The amounts awarded are reasonable in light of the frequency and duration of appellants' mental suffering. Furthermore, the mental anguish damages are not unreasonable when compared to the other damages awarded by the jury. Appellee's cross-point attacking the jury's award of mental anguish damages is overruled.
Evidence of Causation
Appellee additionally challenges the legal and factual sufficiency of the evidence supporting the jury's determination that its alleged DTPA violations caused damage to appellants. Appellants premised their DTPA claims on the representations that appellee allegedly made concerning the quality of its construction and the suitability of a slab-on-grade foundation for appellants' home. Appellants focused their complaints on appellee's selection of the type of foundation to be used in the construction of the home. Appellants asserted that the home should have been constructed with a pier-and-beam foundation. They testified that they brought up the matter of a pier-and-beam foundation during the planning stages of the home's construction. Appellants testified that appellee's representatives advised them that a slab-on-grade foundation would be superior to a pier-and-beam foundation.
Appellee built the foundation for the house without obtaining a site-specific inspection of the soil which would underlie the home. The evidence reflects that appellee had previously constructed another home in the same neighborhood for which a soil inspection had been performed. This soil report stated as follows:
A slab-on-grade floor system should not be used at this site due to the excessive shrink/swell movement potential of the very high plasticity clays found at the site. A raised floor system with a minimum void space of eighteen inches should be used to isolate the structure from the effect of these soil movements.
This evidence reflects deficiencies in appellee's selection of a slab-on-grade foundation for appellants' home. Accordingly, there is both legally and factually sufficient evidence supporting the jury's determination that appellee's alleged DTPA violations were a producing cause of appellants' damages. Appellee's cross-point attacking the jury's determination of causation is overruled.
Appellee's Listed Cross-Points
Appellee's brief contains a section entitled "Cross-Points" which states in its entirety as follows:
Issues which would otherwise be raised by cross-point pursuant to [TEX. R. CIV. P. 38.2(b)] were anticipated by Appellants in Issues [3] and [4], to which response is made above. However, pursuant to said rule, Appellants reiterate by cross-point the issues raised in its motion for new trial which were not reached by the trial court and which were not otherwise anticipated by Appellants in their opening brief.
Cross-Point No. 1: There is factually insufficient evidence to support the jury's answer to Question No. 2 (false, misleading or deceptive act or practice).
Cross-Point No. 2: There is factually insufficient evidence to support the jury's answer to Question No. 3 (unconscionable action or course of action).
Cross-Point No. 3 There is factually insufficient evidence to support the jury's answer to Question No. 9 (knowing conduct).
Cross-Point No. 4 There is factually insufficient evidence to support the jury's answer to Question No. 11 (additional damages under the DTPA).
Appellee does not present any argument in support of the four cross-points listed in its brief. See TEX.R.APP.P. 38.2(a)(1) 38.1(h). Irrespective of this deficiency, we will address, in the interest of justice, the contentions which appellee has listed as cross-points.
Cross-Point No. 1
The merits of Cross-Point No. 1 (factually insufficient evidence of a false, misleading, or deceptive act or practice) have previously been addressed in our discussion of the evidence supporting the jury's determination of causation. Appellants testified that appellee represented to them that its construction of the home would be of high quality. There is also evidence of appellee making representations about the suitability of a slab-on-grade foundation for appellants' home. In light of the evidence pertaining to deficiencies with the home's construction, there is factually sufficient evidence to support the jury's determination that appellee engaged in false, misleading, or deceptive acts or practices that were a producing cause of damages to appellants. Cross-Point No. 1 is overruled.
Cross-Point No. 2
Cross-Point No. 2 addresses the jury's determination that appellee engaged in an unconscionable course of action. Appellants alleged unconscionability as an alternative theory of recovery under the DTPA. Our review of the jury's determination of unconscionability is not necessary in light of the jury's determination that appellee engaged in false, misleading, or deceptive acts or practices that were a producing cause of damages to appellants.
Cross-Point No. 3
The merits of Cross-Point No. 3 (factually insufficient evidence of knowing conduct) were also addressed in our discussion of the evidence supporting the jury's determination of causation. A finding that a DTPA defendant's conduct was committed knowingly permits a claimant to recover damages for mental anguish and additional damages of not more than three times the amount of economic damages. Section 17.50(b)(1). The supreme court has held that a knowing violation occurs when the offending party has "actual awareness" of the deception:
"Actual awareness" does not mean merely that a person knows what he is doing; rather, it means that a person knows that what he is doing is false, deceptive, or unfair. In other words, a person must think to himself at some point, "Yes, I know this is false, deceptive, or unfair to him, but I'm going to do it anyway."
St. Paul Surplus Lines Insurance Company, Inc. v. Dal-Worth Tank Company, Inc., 974 S.W.2d 51, 53-54 (Tex. 1998). The fact that appellee possessed a soil report from a lot in the same neighborhood which recommended that a slab-on-grade foundation not be used constitutes factually sufficient evidence to support the jury's finding of knowing conduct. Cross-Point No. 3 is overruled.
Cross-Point No. 4
Appellee challenges the factual sufficiency of the evidence supporting the jury's award of $1,000,000 in additional damages under the DTPA. Based upon the jury's finding of knowing conduct and its award of economic damages to appellants in the amount of $657,000, the jury could have awarded additional damages of up to $1,971,000. See Section 17.50(b)(1). Since the jury's award of additional damages was less than three times the amount of economic damages, the jury acted with discretion in making this award. Cross-Point No. 4 is overruled.
Conclusion
The trial court's judgment notwithstanding the verdict is reversed and rendered in favor of Gary Carpenter and Julie Perez. This case is remanded to the trial court for the entry of a final judgment awarding Gary Carpenter and Julie Perez damages in accordance with the jury's verdict.